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Deals & M&ABy The PetRetailNews Desk3 min readSeptember 7, 2026
Petco's Reptile Sales Grew While Most Indies Walked Away. The Margin Math Says Why.
The category doing the work was one most specialty stores no longer stock, and the consumables followed the animal out.
Petco reported its second consecutive quarter of positive comparable store sales, and the segment responsible was one most specialty retailers have dropped: live reptiles and the products customers buy after taking one home.
The fork in the road Petco and specialty took differently
Petco's net sales for Q2 fiscal 2026 reached $1.5 billion, a 0.05% increase year over year, with comps up 0.6%. The chain ended the quarter with 1,377 stores nationwide after closing one location. In the earnings call, chief executive Joel Anderson said the April through June period brought unusually strong results in live reptiles, and that strength carried into related food and habitat products.
The consumables segment contributed nearly half of total net sales, followed by supplies and companion animals at 33%. The remaining 18% came from services.
Anderson described companion animals as offering "a highly differentiated category where our physical store provides a distinct competitive advantage" against online competitors and big-box rivals, adding that the segment plays a central role in the company's experiential merchandising approach.
The chain has kept live reptiles on the floor. Anderson told investors the category saw particular strength during the quarter.
The attachment dynamic specialty cannot replicate at volume
A customer who purchases a live reptile typically needs habitat products and commits to recurring food purchases. The company reported that reptile food and supplies saw gains during the quarter. A store without live animals confronts a different calculus: can you move the consumables without the animal that triggers the first sale?
Anderson said the companion animals segment saw particular strength in live reptiles, which fueled gains in reptile food and supplies.
For retailers who exited live reptiles, the Q2 disclosure surfaces a question about whether the consumables buyer returns to the store where they acquired the animal.
Petco's gross profit in Q2 rose 0.9% to $591.1 million. Gross margin came in at 39.7%, climbing 37 basis points with help from tariff rebates. Operating income grew 11.1% to $47.8 million. Net income jumped 176% to $38.7 million. Tariff rebates contributed a net benefit of $6.8 million to the quarter's results.
Anderson also highlighted momentum from new cat treat SKUs, including the rollout of Cat Candy Shop, the company's private label cat treat line, plus ongoing traction in what he called the "gardening with your pets" segment, led by potted houseplants and garden seeds marketed as pet safe.
But the reptile disclosure stood apart. The company held its full year outlook steady, projecting net sales growth of flat to 1.5% and adjusted EBITDA of $415 million to $430 million. For Q3, management expects sales growth of 0.4% to 1% and plans to shutter 15 to 20 locations in the period.
Anderson framed reptiles as delivering "a distinct competitive advantage" through brick and mortar presence, the kind of differentiated positioning that carries weight when comp growth registers at 0.6%.
Where this leaves independents Monday morning
If you carry reptile consumables but stopped stocking live animals, the Q2 results surface a question worth considering: where does the reptile owner shop for substrate, supplements, and feeder insects?
The move, if you remain in reptile consumables: product knowledge becomes your edge. If you cannot compete on live animal assortment, you compete on expertise around supplementation timing, UVB bulb replacement cycles, and substrate blends tailored to individual species.
If you dropped reptile consumables entirely, Petco's Q2 indicates the category is delivering for the chain that stayed in.
The thing we could be wrong about: if a cohort of specialty reptile brands begins securing distribution in independents with education-heavy merchandising and richer margin structures, the consumables opportunity reopens. But that requires the brand to replicate the work Petco accomplishes with live animals, creating the reason to visit, and most brands lack the infrastructure to shoulder that role.
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